2021 (12) TMI 1197

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..... able or not? 3. In the assessment order, the Assessing Officer (AO) has noted that while pursuing statement of income, the assessee-company has claimed under the loss of Rs. 26,59,169/- as per the profit and loss account for the Financial Year 2012-13. The Assessing Officer (AO) has asked the assessee to explain why the loss has to be allowed when there was no sales and purchase. The ld. counsel for the assessee has submitted that Financial Year 2012-13, the assessee company has paid advance for the purchase of raw material. The A.O has considered the same and observed that there was no business performed, the claim of loss claimed by the assessee is disallowed. On appeal before the Ld. CIT(A), it was submitted that the assessee has alread .....

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..... igh Court of in the case of CIT v. LG Electronic (India) Ltd. [2006] 282 ITR 545 (Del.) and submitted that the loss claimed by the assessee is allowed. 6. On the other hand, the ld. Departmental Representative has strongly supported the orders passed by the authorities below. 7. Both the parties have been heard, perused the material available on record and gone through the orders of the authorities below. 8. The assessee is engaged in the business of engineering industry and claimed the business loss of Rs. 26,59,169/- for the year under consideration. The case of the assessee is that the assessee-company is ready for the commencement of the business and placed the order for raw material and advance also paid therefore, the loss claimed .....

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..... usiness. In the present case, the assessee has already set up the business and it commences only once raw material reaches. The assessee has already paid advance for supply of raw materials and therefore, the loss claimed by the assessee during the year under consideration cannot be disallowed on the ground that the assessee is not commenced the business. Therefore, respectfully following the judgment of Hon'ble Delhi High Court in the case of CIT v. L.G. Electronic (India) Ltd. (supra), the order passed by the Ld. CIT(A) is allowed. Thus, the appeal filed by the assessee is allowed. 9. In the result, the appeal filed by the assessee is allowed. Order pronounced on 17th November, 2021 in Chennai.
Case laws, Decisions, Judgements, Orde .....

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